QBE to Acquire NAU Country Insurance for $565 Million

QBE Insurance Group said it's agreed to acquire NAU Country Insurance Co., the third-largest crop insurer in the United States, for $565 million.

The acquisition marks QBE's entrance into the U.S. crop insurance market.

Ramsey, Minn.-based NAU Country Insurance is the third-largest multiperil crop insurer in the United States, based on 2008 direct premiums written, according to BestLink, which provides online access to A.M. Best's Global Insurance & Banking database.

Pending regulatory approvals, QBE said it expects the transaction to close in July.

The acquisition is part of QBE's plan to grow its U.S. business through product diversification and new distribution channels. NAU has 10 offices and more than 1,600 independent agents.

The acquisition will complement QBE's agricultural book of business, QBE Americas' Chief Executive Officer John Rumpler said in a statement. The company declined to comment beyond a press release.

Through its subsidiaries, QBE writes other agricultural business such as farmowners and commercial agricultural.

In 2009, NAU wrote $953.8 million of direct premiums written in 2009, according to BestLink. Net income was $95.9 million. The combined operating ratio was 61.1 in 2009, 88.9 in 2008 and 56.8 in 2007, according to BestLink.

NAU writes business covering 84 separate crop types, spanning 33 million acres for 58,000 farmers, according to supplemental information that QBE provided.

Including the acquisition, QBE said it expects to top $5 billion in gross written premium for 2010.

In 2008, the top five writers of multiperil crop insurance in the United States were Wells Fargo Insurance Group, with 16.9% market share; Ace INA Group, 16.9%; NAU Country Insurance Co., 10.9%; Great American Property & Casualty Insurance Group, 9.9%; and Allianz of America, 8.3%, according to BestLink.

QBE Insurance Corp. currently has a Best's Financial Strength Rating of A (Excellent). NAU Country has a Best's Financial Strength Rating of A- (Excellent).

(By Meg Green, senior associate editor, BestWeek: [email protected])